We received this letter and have permission to share it with you.
Michael,
I have to tell you about an amazing marketing tool that we have started using and it works really well. We call it our ‘Referral Bonus Program’. We offer all our previous customers their choice of either a 1% cash bonus on any referral they give us that turns into a contract – or – 15 min of free remodeling on their home for every $1000 of contract sales they refer.
I realized 1) People want to work for someone referred to them because there is some accountability built into it. 2) Previous customers who think of us as a partner will tend to remember us when they need new things. 3) Our previous customers will put on a new positive mind set about us. While we have had virtually no disgruntled customers in the last 4 years (minus one woman who difficult to please), it is easy for people to think negatively about everything they deal with. If they are trying to sell our services to their friends that automatically puts them in a positive mood about us. 4) The cash back is insignificant to the total cost of a project for us but in a household economy even 1% is nice. (We just sold a $6500 job and the referrer was so excited to get a check for $65.) 5) If the customer opts for the free remodeling time (retail of twice the cash value), we get to come back into their house and cement the notion that we are ‘their’ remodeler.
I have sent out 12 letters and have already received 3 referrals from them. It is virtually free marketing.
What do you think?
Alan W. Gray
Principal Managing Member
Northwest Woodcrafters LLC
www.northwestwoodcrafters.com
I think it’s a fantastic idea. This is the new marketplace, gang, and this kind of creative thinking is required. Same old, same old doesn’t work as well. If you want a copy of his letter, send us a note and we’ll forward it to you. Thank you Alan, we all appreciate your sharing.
What a great idea! I would love to see your letter. Good Luck!
I would like a copy of the referral letter from Alan Gray that you mentioned in your blog. I have been wanting to do the same but can’t seem to get it started.
I have a .pdf of the letter I would be pleased to send you just send me an E alan@northwestwoodcrafters.com
I also have some suggestions on how to work with it. It starts when I first meet them. I hand them a full page of every job we have done in the last six months (as many as will fit on a page grouped by type – kitchens, baths, additions, other). I tell them that I have just one goal as owner of the company and that is to have them be our next referral. It takes care of every issue. They know up front what my goal is and they can hold me to it.
About 1/4 the way into the job I purposefully call them and ask if everything is good, any problems with people or processes or whatever.
Then is when I send them a referral letter. It is best to strike when the iron is hot and they see that we have integrity. When the job is about done I go over again and tell them the job looks really good. Some how people want to hear that it went well and it looks really good. Then I tell them how to use the referral letter.
Generally people don’t know how to tell their friends about us without sounding funny so when am there at the end of the project I launch into my “We pretty much live and die by our references” speech. I have suggestions like “something that always helps us and doesn’t sound too funny is to send a group email to a bunch of friends at your work or club or neighborhood and just say ‘If anyone is interested, we found a really good remodeling contractor, if you need a name let me know’
We just sent out 200 of these with a little line card telling what we do. Then I call them (slowly… 200 is a lot of people) and ask them if they got the letter and if it makes sense to them. Almost every time, they don’t quite get it so I tell them how to use it. I explained it to a customer who’s kitchen we remodeled two years ago. She sent out an email to her neighborhood website referring us. We have had two phone calls in the last week.
We have a customer whom I mentioned in one of these postings who referred us to a $60,000 addition job. She has used the customer referral program before and is banking time and money for her own project. I just gave her some estimates last week. You know darn well that if she has other contractors look at it, non of them are going to knock 15 hours of labor cost right off the top of the project so guess who already has an advantage
Anyway, I would love to share anything I can with you all. Email me or call me. My office line is 206 459-0828.
Keep looking up! There is a lot more in those clouds than rain.
I have had a number of people wanting the referral letter so I will post the text of it here. Obviously you will need to tailor it to your needs and come up with your own set of limits and restrictions but here is the text of our letter.
Customer Referral Program
We wanted to tell you that we have certainly appreciated working with all of you, some for many years. We have truly enjoyed every customer we have worked with for the 19 years we have been in business.
For those of you who were referred to us, you know what a comfort it is to do business with someone who comes to you by way of referral. Even if you were not referred to us by a friend, you probably called our references and gained the confidence you needed to know that we were a good match for you and your project.
With the economy taking a bit of a breather, we have found that we are getting most of our new work from you, our previous customers as you have continued to mention us to your friends. We certainly do appreciate this and have decided to offer you an additional incentive for your continued support in building a “word of mouth” referral network for our business.
We are offering to repay your kindness by offering you a *Referral Bonus in the form of our handyman or repair services, free of charge, for those little projects you never seem to get to or can never seem to get help doing.
We are offering 15 minutes of repair or maintenance service for every $1000 of work you help us find. On a $32,000 kitchen remodel for example, would get you an 8 hour day of our help around your house which can go a long way with little projects.
Even if you are all caught up on your house projects, we would still like to thank you for your help by offering a 1% cash back bonus as an alternative.
The way it works is: Go to our webpage http://www.northwestwoodcrafters.com and click the Send Us A Message tab. Enter your name and contact information with the name and contact information of a referral in the Your comments field. We will contact your referral and if it all works out we send you a credit for your services or a check for your help.
Pulling together over the course of time, we will all get things back on track. We certainly appreciate and depend on you in many ways. Thanks again for being wonderful people and enjoyable customers.
Alan Gray – Northwest Woodcrafters LLC
alan@northwestwoodcrafters.com
Office: 206 459-0828
*Some limits & restrictions apply – contact Northwest Woodcrafters LLC for details
(07/24/2009)